Rolls-Royce Seeks Short-Haul Return on Boeing’s Planned 797

(Bloomberg) -- Rolls-Royce Holdings Plc will bid to power a new short-haul jetliner being designed by Boeing Co. as the U.K. engine maker seeks to re-enter a market it quit in 2011.

Rolls is preparing a pitch to Boeing as the U.S. manufacturer works on the business case for a so-called middle-of-market plane, Chief Executive Officer Warren East said in comments after the company's annual general meeting.

“The answer is that we are pursuing it,” East said Thursday at the shareholder gathering near its main manufacturing site in Derby, England. “It's not ‘will we be pursuing it.' We are pursuing it.” The engine would be available by 2025, when the Boeing jet is slated to enter service, he said.

Rolls has been mulling ways of getting back into the market for powering short-haul jets, with the Boeing project presenting it with an opportunity to do so several years before the likely replacement of the existing 737 and Airbus SE A321 single-aisle models.

While the European engine maker has grabbed a major slice of the lucrative long-haul engine sector with its Trent engine series and is also a supplier to regional and corporate planes, short-haul jets represent the backbone of the airline industry, with sales dwarfing those for bigger models.

The engine being designed for the Boeing jet draws on the two main technology programs underway at Rolls-Royce, Paul Stein, the company's chief technology officer, told reporters at the AGM. Those are the Advance engine core due to be built by 2020, and the UltraFan design featuring a new “power gearbox” and targeting a 25 percent efficiency improvement over current Rolls models.

Pratt Split

It's not yet clear whether Rolls-Royce will pursue the project with a partner, though the company is open to doing so in principle if the business conditions are right, East said. “We've done it before,” the CEO said. “If that's the practical way of doing it, then we might well.” He added that decisions on industrial partnerships can come “years into the process, rather than months.”

Rolls previously had a 33 percent stake in the International Aero Engines AG pact with Pratt & Whitney, giving it a major presence in the short-haul market. It exited in 2011, partly because of a disagreement over future technology for the segment with Pratt pushing its geared-turbofan development for the A320neo and 737 Max upgrades.

Following the exit from IAE Rolls explored a new 50:50 deal with Pratt, before abandoning the plan in 2013 amid antitrust concerns. A solo return to the sector would pit it against both the United Technologies Corp. unit and the CFM International alliance of General Electric Co. and Safran SA.

Stein said that the ultrafan and geared turbofan aren't ultimately compatible designs. The Rolls engine is being developed with a thrust range of 25,000 pounds to 110,000, making it suitable for the entire span of Boeing and Airbus jetliners, including the new middle-of-market plane, which could require 40,000 to 50,000 pounds of thrust.

The aircraft, likely to be named the 797, would seat between 225 and 260 passengers, placing it between the biggest 737 and the smallest 787 Dreamliner. Initially envisaged as a successor to the 757, the longest-ever narrow-body plane, which ceased production in 2004, the aircraft is now conceived as a small twin-aisle model closer in proportions to the 767.

To contact the reporter on this story: Benjamin Katz in London at bkatz38@bloomberg.net.

To contact the editors responsible for this story: Chris Reiter at creiter2@bloomberg.net, Christopher Jasper